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Whole Foods Market, Inc. and the Federal Trade Commission recently announced a settlement in connection with litigation related to Whole Foods Markets’ $565 million acquisition of Wild Oats Markets, Inc. Dechert LLP has represented Whole Foods Market in this matter since 2007, shortly after the FTC filed a complaint challenging the transaction. During the last several months, Whole Foods/Wild Oats case became the most closely watched antitrust merger matter in years.

The settlement, pursuant to FTC protocol, has been placed on public record for a 30-day comment period ending April 6, 2009. Under the terms of the agreement, a divestiture trustee has been appointed to market for sale various assets, including leases and related assets from various former Wild Oats stores, as well as trademarks and other intellectual property associated with Wild Oats stores.

Initially, the FTC sought a preliminary injunction against Whole Foods’ proposed $565 million acquisition of Wild Oats. Dechert’s team devised a winning strategy and executed on that strategy throughout the expedited discovery process which culminated in a two-day hearing before Judge Paul L. Friedman in the U.S. District Court for the District of Columbia July 31 and August 1, 2007. In that short period, there were four expert reports, five rebuttal expert reports, five expert witness depositions, 19 fact witness depositions, and 16 fact witness declarations. Judge Friedman issued a 93-page opinion on August 16, 2007, denying the FTC’s motion for a preliminary injunction blocking the merger.

The Commission sought an injunction pending appeal - first from the District Court and then from the Court of Appeals. Both were denied, paving the way for Whole Foods to complete the merger.

The U.S. Court of Appeals for the District of Columbia Circuit, in a split decision handed down eleven months after the merger was completed, reversed the denial and remanded the case to the U.S. District Court for further evidentiary proceedings. A petition for rehearing en banc authored by the Dechert team led to revisions to each of the opinions of the three panel members so that there was only a judgment, but no opinion, of the court.

Separately, the FTC resumed its administrative action challenging the acquisition and seeking to have it undone. The Commission appointed one of the sitting commissioners as presiding officer for the administrative action, only to appoint an independent administrative law judge later, after initially denying the motion by the Dechert team to do so earlier.

In the remand proceeding before the District Court, the FTC sought a paper proceeding. Judge Friedman, after a powerful argument by the Dechert team, ordered a two-day evidentiary hearing during which Whole Foods would be able to demonstrate the substantial consumer benefits that actually resulted from the transaction.

Shortly before the dates for the remand hearing and the administrative trial, the cases settled and the merger remained intact subject to selective divestitures.

About Dechert’s Antitrust/Competition Practice

Dechert’s top-ranked antitrust/competition team is recognized annually by Chambers Global, Chambers USA, Chambers Europe, The Legal 500, Best Lawyers in America, and Practical Law Company. Our lawyers in the United States and Europe provide clients with integrated global solutions to business risks posed by merger enforcement; antitrust litigation, especially class actions; cartel investigations; and other government competition law investigations.